News alert: New York calls on insurers to ditch coal
April 27, 2020
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New York pension funds ask insurers to ditch coal
On Friday 24th April, New York City Comptroller Scott Stringer on behalf of the city’s pension funds called on AIG, Berkshire Hathaway and Liberty Mutual to end all business with the coal industry, including ceasing to underwrite coal projects and divesting from coal companies. Stringer told the insurers that continued involvement in the coal sector was “simply incompatible both with your obligation to protect your clients from harm…and your responsibility to protect and create long-term shareholder value”.
New York is the third major city to call on insurers to ditch coal, following similar actions by Paris and San Francisco in 2018. Insure Our Future campaigners applauded the call as a “welcome step forward for New York City”. The letter from the epicenter of the COVID-19 crisis sends a strong message that we can continue to address the climate emergency while fighting the pandemic.
Connecticut bill seeks transparency over fossil fuel insurance
A bill proposed by Matt Lesser, the co-chair of the Connecticut senate’s insurance committee, will require the state’s insurance commissioner to report on the extent to which insurers licensed in the state underwrite and invest in fossil fuels. The bill is significant because Connecticut is considered the insurance capital of the U.S.A.
A report published by Connecticut Citizen Action Group and other NGOs on April 9 found that Connecticut’s 30 largest insurers, including Travelers, the Hartford and Cigna, have invested no less than $221 billion in fossil fuels. “This report allows us to look at major players in one critical Connecticut industry and identify next steps for action”, commented State Senator Lesser.
Former insurance manager calls for exit from fossil fuels
“To truly tackle the climate crisis at scale, the insurance industry must adopt clear plans to align all of their business with 1.5º C”, a recent commentary in PropertyCasualty360.com states. “That starts with not supporting the build-out of new coal, oil or gas projects and fully phasing out coal and tar sands business.”
The commentary makes an impassioned case for climate action and warns that “insurers will increasingly struggle to attract and retain qualified talent if they continue to support activities that exacerbate climate change”. The text is special in that it wasn’t written by an Unfriend Coal campaigner but by Kevin McComber, a former manager of a top-10 P&C insurer.
“It’s time for U.S. insurers to catch up with global efforts to tackle the crisis”, the author concludes his call to action. “There are no more excuses.”
NGOs call on insurance associations to advocate for a green and fair recovery
Insurers must champion a green and fair recovery from the COVID-19 crisis because they have a unique understanding of global threats, 23 NGOs from 11 countries say in a letter to industry associations released on April 30. They say the industry was fully aware of the risks of a global pandemic years ago but failed to ensure governments prepared effectively, and warn it not to make the same mistake again now that insurers recognize the climate emergency is the world’s greatest threat.
“International insurance associations and many of their member bodies have made numerous public commitments about the need for rapid climate action”, the letter states. “If you are serious about these commitments you now need to speak out, vigorously and publicly, at the international and national level for green and fair recovery programs which are consistent with the IPCC’s 1.5°C pathways.”
The NGOs asked the 12 international associations they addressed to respond to their appeal in the form of public statements by May 18.
New Lloyd’s report dodges coal question
The transition to a low-carbon economy will bring “radical change” to the power sector, and fossil fuel generators will remain “a focus of litigation” against the climate impacts they have caused, a new report commissioned by Lloyd’s finds. The report warns that “pressure from investors and environmental groups [on insurers to exit the coal sector] could be significant and might impact on companies’ reputation and their own ability to attract investments”. Yet it remains meekly silent on the major role which Lloyd’s continues to play in insuring coal and does not propose an exit from the coal sector among its recommendations.
Brokers like to have it both ways on climate change and fossil fuel insurance
On April 16, Willis Towers Watson published its annual Energy Market Review for 2020. Like every year the report offers a useful overview of trends and actors in the energy sector, while hedging its bets on the need for a clean energy transition.
The report’s focus is on Environment, Society and Governance (ESG) topics. Margaret-Ann Splawn, one of the report’s guest authors, doesn’t mince words in her contribution. “Capital has to be reallocated to support the just transition to a zero-carbon economy”, Splawn states. “Such a just transition means balancing society and the economy, along with managing the transitional implications for potentially ‘stranded’ assets, communities and workers.”
The rest of the report remains silent on the transition to a zero-carbon economy however, and includes a number of puff pieces on fossil fuel companies and their insurers. The report reflects the hypocrisy of many broker firms, who like to sell advice for climate action and resilience without ever infringing on their own fossil fuel business.
Global insurance broker Marsh are helping the Adani Group find insurance for their climate-wrecking Carmichael coal project in Australia. Sign the petition calling on Marsh ahead of their May 21 AGM to help insure our future, not the Carmichael project!
FOSSIL FREE INSURANCE NEWS YOU MAY HAVE MISSED
Elana Sulakshana & Tamara Toles O’Laughlin, Op-ed: Big Insurance Is Climate’s Quiet Killer, Rolling Stones, 4/20/2020
Luke Gallin, Energy & power industry should prepare for turmoil, warns Marsh JLT Specialty, Reinsurance News, 4/16/2020
Peter Bosshard, Insurance, Pandemics and Climate Change, Environmental Finance, 4/13/2020
Swiss Re Institute, Natural catastrophes in times of economic accumulation and climate change, Sigma 2/2020, 4/8/2020
Peter Bosshard, China’s Largest Insurer Must Walk Its Climate Talk, The Diplomat, 3/20/2020
Fred Pearce, As Investors and Insurers Back Away, the Economics of Coal Turn Toxic, YaleEnvironment360, 3/10/2020
Market Forces, QBE faces shareholder resolution on oil and gas support, 3/5/2020